BAY CITY, MI – A federal grand jury has charged a Bay City surgeon with running a health care fraud scheme that allegedly netted him millions of dollars.

The grand jury on June 26 indicted Dr. Vasso G. Godiali on five counts of money laundering and two counts of health care fraud. Money laundering is a 20-year felony, while fraud is punishable by up to 10 years in prison.

The 19-page indictment was unsealed Wednesday, July 10.

Godiali, 56, is a vascular surgeon who practiced out of Bay City Vascular at 2010 15th St. in Bay City.

The indictment states that from 2009 to 2015, Godiali defrauded Medicare, Medicaid and Blue Cross Blue Shield of Michigan. To do so, he submitted false claims to the three health-care plans.

“Godiali performed certain procedures but then dictated operative reports billed and billed Medicare, Medicaid, and BCBSM for multiple additional procedures that he did not perform,” the indictment states. “Godiali falsely recorded that he had removed fractured stents to justify purported stent placements that were not medically necessary.”

In 2009, Medicare paid the doctor $73,896 for placing 41 vascular stents, the indictment states. In subsequent years, Godiali increased the number of stents for which he was paid by Medicare. In 2013, he reported having placed 250 stents and received $792,789 from Medicare; the following year, he reported having placed 245 stents and received $713,356.11, the indictment reads.

Godiali also falsely recorded that he observed and removed blood clots from his patients. Medicare in 2010 paid Godiali $8,956.68 for 12 such procedures.

Over the following years, Godiali reported a steadily increasing number of patients on whom he’d performed the procedure. In 2014 alone, Godiali reported he performed 815 blood-clot-removal procedures (or mechanical thrombectomies), for which Medicare paid him more than $1.1 million.

The indictment goes on to allege Godiali submitted bogus claims to Medicaid, Medicare and Blue Cross for services not rendered and that he “unbundled” claims to falsely claim he was performing many separate and distinct procedures, when in fact he was entitled to a single reimbursement for a single procedure.

Godiali also used six corporations through which he laundered about $49 million, which he used to fund investment accounts at multiple financial institutions, the indictment states. The doctor also used proceeds from the scheme to pay property taxes on a Houghton Lake residence, according to the document.

The case was investigated by Special Agents of the U.S. Department of Health and Human Services and the FBI, with cooperation and assistance from the Michigan Attorney General’s Office and Michigan Department of Health and Human Services’ Office of Inspector General.

"This is a large, significant and important prosecution,” said U.S. Attorney Matthew Schneider. “Health care fraud schemes, such as the one alleged to have been committed by Dr. Godiali, divert millions of dollars from public programs intended to help those in need for the sole purpose of lining the pockets of greedy doctors. I salute (Michigan) Attorney General Dana Nessel and her staff, along with the entire law enforcement team that labored so tirelessly on this case. The work that culminated in today’s indictment demonstrates cooperation and teamwork at its best.”

“Flagrant efforts to scam Medicare, Medicaid and Blue Cross Blue Shield of Michigan are despicable in any degree — but particularly so when tens of millions of dollars are involved,” Nessel added. “Thanks to United States Attorney Matthew Schneider and his team along with the efforts of our own Health Care Fraud Unit and the Michigan Department of Health and Human Services Office of Inspector General staff, which initiated the early investigation into this alleged health care fraud scheme, it has come to a halt. Once it became clear that the potential Medicare fraud exposure in this case was ten times what our own Medicaid fraud exposure was, we reached out to the U.S. Attorney’s Office to increase the depth and breadth of the investigation. I am proud of the efforts of everyone involved and look forward to making sure this doctor never sees another dime of taxpayer money.”

The U.S. Attorney’s Office has also filed a related civil lawsuit seeking the forfeiture of approximately $39.9 million seized from accounts controlled by Godiali or related to four separate real estate transactions.

Godiali’s next court date is pending.

In 2014, The Bay City Times interviewed Godiali after USA Today reported he was one of seven physicians in the country who received more than $10 million for Medicare reimbursements in 2012.

“I work a lot – I work probably more than surgeons that you meet,” he said at the time. “And people that I meet, my colleagues, they know it.”

Also in the 2014 interview, Godiali said he works 18 to 20 hours per day, seven days a week, and sees patients every day, adding up to more than 1,600 visits per year. Most of his patients are there on Medicare-related visits, he said.